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Dollar Strengthens Modestly Amid Mixed Market Sentiment

3 weeks ago

The dollar edged slightly higher against its Group-of-10 counterparts, maintaining a marginal strength, while the offshore yuan saw minimal movement following renewed support from the People’s Bank of China.

Meanwhile, the yen faced downward pressure, sliding to its lowest level against the dollar since 1990. This decline followed hawkish remarks from a Bank of Japan board member, who signaled the continuation of accommodative financial conditions. In Asian trading, Treasuries stabilized after a rebound from earlier session lows, spurred by a $67 billion sale of five-year notes.

The yen’s dip to a 34-year low against the greenback reflects expectations that Japan’s yield gap with the US will persist, despite the Bank of Japan’s recent policy shifts away from negative interest rates.

In the commodity markets, oil prices extended a modest decline following reports of a significant build in US inventories. Broader market sentiment remained subdued as the quarter drew to a close. Gold prices dipped but remained close to record levels.

As traders awaited the release of the Fed’s preferred inflation gauge on Friday, they closely analyzed the latest economic indicators. US consumer confidence held steady, while durable goods orders rose and home-price growth accelerated at its fastest pace since 2022. Market participants navigated these developments amid the anticipation of market closures for the end of the quarter.

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